After $1,000 Drop, Bitcoin Buy Signal Could Conjure Bullish Reversal
After an incredible 2020 recovery rally from Black Thursday lows, Bitcoin price may have topped out for the year. Several indicators have been pointing to a peak in the cryptocurrency; however, a buy signal on daily timeframes could suggest a short term recovery instead.
The crypto asset appears to be trading within a falling wedge pattern that may propel prices higher if a breakout occurs. Bitcoin may also see a boost from today’s meeting hosted by Fed chair Jerome Powell. Here’s what else to expect.
Bitcoin Price Collapses $1,000 Following 2020 High At $12,400
Bitcoin price over the past week fell from previous highs above $12,400 to as low as $11,100, securing an over $1,300 loss for crypto bulls.
Several indicators, all with a track record of accuracy and success, are pointing toward a short-term peak in price action after an over 200% climb from March 2020 lows.
The leading cryptocurrency by market cap bounced hard at $3,800 and has been on a slow and steady rise since. After months of consolidation below $10,000, the asset recently breached the key level and quickly rocketed to over $12,000.
But whether or not the uptrend is over remains to be seen, and it is currently too early to tell. There are also conflicting signals mounting, such as a buy setup coinciding with a falling wedge pattern on daily timeframes.
BTCUSD Daily Falling Wedge and TD 9 Buy Setup | Source: TradingView
TD 9 Buy Setup And Falling Wedge Could Save Uptrend, But 13 Countdown Waits In the Wings
The TD Sequential indicator – designed for timing market tops and bottoms – is signaling a buy setup in BTCUSD on daily timeframes. This highly accurate signal has called several tops and bottoms on crypto assets in the past. Still, like any indicator, it usually works best when confirmed by other signals or patterns.
These signals are also more dominant the higher the timeframe, and although Bitcoin price is exhibiting the strong buy signal on daily charts, higher timeframes such as the 5-day and 2-week are on nine sell setups.
Interestingly, BTCUSD is also working on a 13 sell setup if the asset makes a new higher high. The TD Sequential indicator offers sequences for both setups and countdowns. Bitcoin is currently on a 12 count awaiting a new high to be set.
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That new high could soon be coming if the asset can break out from a falling wedge pattern coinciding with the TD9 buy setup. Falling wedge patterns are typically bullish reversal patterns; however, they have been known to break down.
News regarding inflation coming out of today’s speech from Fed Chairman Jerome Powell could provide the buying momentum Bitcoin needs to put in that new high. From there, it will be interesting to see which signal is more dominant: the nine buy setup, or the TD countdown reaching a 13 sell setup.
Featured image from Deposit Photos.